Robots Induce Polarisation OECD finds

This report analyses automation trends and its effect on employment in OECD countries. On average, robots are found to be associated with a reduction in employment in elementary occupations – those requiring the lowest levels of skills – and an increase in employment in high-skill occupation such as professionals and technicians. For occupations in the middle of the skills distribution the correlation is strong and negative. In general, therefore, these estimates do not support the hypothesis of labour market polarisation, i.e.: an increase in both high-skill and low-skill employment. However, in a few countries – notably the United States – this report finds evidence of labour market polarisation.

Dramatic improvements in technology allow automating an increasing number of tasks and occupations. For this reason, there is a widespread concern that new technologies might destroy a large number of jobs and cause “technological unemployment”. The threat of displacement is believed to be particularly strong with industrial robots, because they are explicitly designed to perform tasks that would otherwise be performed by humans.

This report sheds light on automation trends and their effect on employment. A better understanding of what robots actually do and to what extent they are used across countries and sectors can help policy makers to design policies aimed at smoothing the transition towards industry 4.0.

The data used in this report reveal that robots are disproportionally in use in advanced economies, which suggests that the issue of automation is particularly relevant for the OECD.

The report finds that different categories of robots are differently correlated to employment in different occupations. In addition, the sign and magnitude of these correlations vary across countries.

On average, robots are found to be associated with a reduction in elementary occupations – those requiring the lowest levels of skills – and an increase of professionals and technicians, high skill professions. For occupations in the middle of the skill distribution the correlation is strong and negative.
In general, therefore, the estimates presented in this report do not support the hypothesis of labour market polarisation, which would imply an increase in both high-skill and low-skill employment. However, some country-specific results – most notably for the United States – can be interpreted as evidence in support of this hypothesis.